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Changes Ahead for Amtrak

New pilot projects authorized by the FAST Act include allowing private operators to bid on operating three of Amtrak's 15 long-distance lines for up to eight years "provided they reduce the need for taxpayer support" and allowing pets on trains.
December 7, 2015, 1pm PST | Irvin Dawid
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Among the changes in the five-year Fixing America’s Surface Transportation (FAST) Act that was signed by President Obama on December 4 are these two Amtrak pilot projects. First, allowing private rail operators to bid on long distance routes (PDF) that some say will "likely will al­ways lose money":

"(P)otential competitors would submit an operating plan that includes steps to reduce taxpayer operating subsidies by 10% or more, while at least matching Amtrak’s performance," writes Andrew Tangel for The Wall Street Journal. If they "took over some Amtrak routes, it would mark a significant shift in how America’s national passenger railroad has been run since the federal government created it in 1970."

Private operators have already penetrated the commuter rail sector. "Herzog Transit Services Inc. operates Caltrain in the San Francisco Bay area (and) Transdev North America Inc. [formerly Veolia Transportation] runs the Tri-Rail line in South Florida," notes Tangel.

If the private sector could reduce the operating losses of Amtrak's money-losing long distance lines, Amtrak's profitable Northeast Corridor (Northeast Regional lines and Acela Express) would come out a winner.

For fiscal 2015, which ended Sept. 30, Amtrak said the Northeast Corridor generated $479 million in adjusted operating surpluses, while its long-distance lines lost $495 million. Its state-supported routes, which generally run under 750 miles, reported $96 million in operating losses.

Whether any of the four members that make up the Association of Independent Passenger Rail Operators would want to take on such a proposition is another story.

 “I’m not sure what kind of interest we’re going to get from private-sector partners in this,” said Robert Puentes, a senior fellow at the Brookings Institution.

Joseph Boardman, Amtrak’s president and chief executive, expressed doubts competitors would wind up taking over the lines. He noted the steep expenses associated with running long-distance trains, including staffing the dining cars, refueling and sewer and water service.

Another pilot project authorized by the FAST Act will strike close to home for pet lovers. They have Rep. Jeff Denham (R-Madera, Calif.), no friend of California high-speed rail, to thank, or more precisely, his 15 pound French bulldog, Lily, according to Jennifer Scholtes, transportation reporter for POLITICO Pro.

Amtrak will have to dedicate at least one “pet car” on each train, where feasible, to allow passengers to transport kenneled pets either as carry-on or checked luggage. The rail operator is barred from using any federal funds to operate the program and is instead required to charge an extra pet fee to cover the cost. 

He and Lily have been trying since 2013 to make Amtrak pet-friendly.

"Little-heralded changes" in the FAST Act are the focus of a New York Times piece, including changes to the 1998 interstate tolling pilot project.

Hat tip: Mark Boshnack

Full Story:
Published on Friday, December 4, 2015 in The Wall Street Journal - Business
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